DTN Early Word Livestock Comments 02/24 06:14

DTN Early Word Livestock Comments 02/24 06:14 Cattle Futures May Open Higher in Reaction to COF Report The cattle market did not want to do much ahead of the Cattle on Feed report Friday and futures had little reason to move higher based on cash cattle trade. Hog futures diverged as traders were concerned over near-term demand, but were friendly to later contracts. Robin Schmahl DTN Contributing Analyst Cattle: Lower Futures: Mixed Live Equiv: $229.49 -$0.99* Hogs: Higher Futures: Higher Lean Equiv: $102.81 +$3.06** *Based on the formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. The index has been updated to depict recent changes in live cattle weights and grading percentages.) ** based on formula estimating lean hog equivalent of gross packer revenue. GENERAL COMMENTS: There was limited price movement in cattle futures Friday ahead of the Cattle on Feed report. The trade had already adjusted to the lower cash, leaving traders positioning themselves ahead of the report. Cash cattle traded $4.00 lower in the South and $5.00 lower in the North. The Cattle on Feed report was neutral to slightly bullish and could provide some support to the market Monday. However, much of it may be factored in already, leaving most of the market direction to boxed beef prices and the expectation for cash trade. Boxed beef was lower Friday, which may limit upside potential. Choice was down $1.86 with select down $0.62. The continued weakness may set the stage for lower cash cattle this week. Feedlots have lost their bargaining power and are selling rather than holding over and potentially receiving yet lower prices. The Commitments of Traders report showed funds reducing their long position in live cattle by 8,766 contracts to a net-long of 127,603. They added 1,501 long futures positions to feeder cattle, bringing their net-long to 28,657 contracts.